The Internal Revenue Service (IRS) is distributing up to $1,400 to nearly 1 million tax filers who were eligible for Covid-19 stimulus checks in 2021 but failed to claim them.
In a proactive move, the IRS is ensuring payments reach taxpayers who missed out on the Recovery Rebate Credit. This credit was created to allow individuals to receive Economic Impact Payments (stimulus checks) they missed in 2021. Initially a self-claimed credit, the agency is now taking steps to ensure every eligible taxpayer receives their payment.
IRS to Distribute $1,400 Automatically to Eligible Taxpayers
“After reviewing our internal data, we identified that one million taxpayers overlooked this complex credit even though they were eligible,” stated IRS Commissioner Danny Werfel in a recent press release. “To simplify the process and ensure these funds reach eligible taxpayers, we’re streamlining the system. These payments will be made automatically, eliminating the need for individuals to file an amended return to claim them.”
This initiative by the IRS highlights their commitment to simplifying processes and ensuring that all eligible individuals receive their entitled benefits without unnecessary complications.
If you haven’t yet filed your 2021 tax return, there’s still time to qualify for the Recovery Rebate Credit. According to the IRS, you need to file by April 15, 2025, to be eligible.
Understanding the Credit and Its Timing
The stimulus check, part of the American Rescue Plan Act of 2021, was the last financial relief payment issued during the Covid-19 pandemic. When claimed through a tax return, it’s referred to as the Recovery Rebate Credit, offering up to $1,400 per person. The amount you receive depends on your adjusted gross income (AGI) and begins to phase out at higher income levels.
Income Requirements for the Recovery Rebate Credit
- Single Filers: If your AGI in 2021 was $75,000 or less, you qualify for the full $1,400. The credit decreases for incomes over $75,000 and is completely phased out at $80,000.
- Married Filing Jointly: Couples with a combined AGI of $150,000 or less qualify for the full $2,800 (for two people). The credit starts to decrease for combined incomes above $150,000 and is fully phased out at $160,000.
- Dependents: Families can receive $1,400 for each dependent in 2021, regardless of age. However, this amount is subject to the same income phaseout limits as the primary filer.
The IRS automatically sends payments to eligible taxpayers, including those who submitted tax returns with blank or $0 entries in the Recovery Rebate Credit field but still qualified for the credit.
